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The State of the Unions

The AFL-CIO and most member unions went all-out for Obama, doing their usual get-out-the-vote phone banking, canvassing, and radio advertising. The Service Employees International Union (SEIU) put 100,000 volunteers in the field the last few days of the campaign. Labor’s message spread fear of Romney’s overt anti-union, anti-worker views and praised Obama’s supposed pro-union, pro-worker policies. Obama’s propaganda, echoed by organized labor, claimed to have saved tens of thousands of jobs in the auto industry, and this resonated in states like Ohio, which has a heavy concentration of automobile-related employment. Labor supporters of Obama also emphasized his appointments to the National Labor Relations Board, Obamacare, and the expansionary fiscal policies that helped prevent a full-scale economic meltdown following the collapse of the housing markets. After Obama’s victory, AFL-CIO president Richard Trumka said that labor’s efforts were decisive for the president’s victories in Ohio, Wisconsin, and Nevada. Unfortunately, neither Trumka nor SEIU president Mary Kay Henry demanded a quid pro quo for their members’ hard work.

We will never know what a Romney administration would have done to working people, and it is impossible to say what the exact impact of Obama’s policies on the working class has been. However, we can say two things. First, the labor movement has continued its march to economic and political irrelevance during the president’s initial term, faring slightly worse than during a similar period under George W. Bush. During the first three years of the Obama administration (2009, 2010, 2011), union density fell from 12.3% to 11.8%, a decline of 4.1%. For the first three years of the George W. Bush presidency (2001, 2002, 2003), density went from 13.3% to 12.9%, a drop of 3%. Union membership declined by 563,000 during the Obama years, and 520,000 for Bush. So all of those wonderful things Obama did for workers didn’t translate into more union members or higher union density.

Second, the demise of the U.S. labor movement predates Obama and Bush by several decades, and the reasons for it have been much discussed. But what does the elimination of labor unions in much of the economy and the loss of power in most of the unions still standing mean for working people? For the society as a whole?

Let’s look at the economics. Unions improve wages and benefits not just for their members but for the working class as a whole. The latter effect occurs because nonunion employers might pay higher wages and benefits to avoid unions in their workplaces, and because union gains in such things as pensions, health and safety, and grievance procedures might become the standard for many other workers.

Lawrence Mishel and his colleagues at the Economic Policy Institute have documented the union impact on wages and benefits in the latest edition of The State of Working America. For all workers in the United States, the union wage premium in 2011 was 13.6%. That is, on average, union members earn this much more than their nonunion counterparts. The comparison is made especially significant since it holds the following wage-determining factors constant: experience, education, region, industry, occupation, race/ethnicity, and marital status. This means that if we compare those with the same education, race, occupation, etc., union workers still make more money. We get similar results if we look at benefits. Union employees are more likely to have employer-financed health insurance (28.2%), pensions (53.9%), and time off (14.3%). Union benefits are also better. For example, union workers have lower deductibles and copayments in their healthcare plans and are much more likely to be covered when they retire. They are more likely to have defined benefits pensions (in which they are guaranteed certain pension payments, as opposed to defined contribution plans in which employees pay fixed amounts into an individual retirement account but are guaranteed nothing in terms of pension pay-outs).

The collapse of union membership, especially in the private sector of the economy, has reduced the union advantage considerably. In terms of the impact of this decline, it is useful to look at specific categories of workers. Unions in the United States have always benefitted blue-collar and less formally educated workers the most (The same is true for racial minorities). The decline in union membership among these groups has been precipitous. For blue-collar employees, union density fell from 43.1% in 1978 to 17.8% in 2011, and for high school graduates, it dropped from 37.9% to 14.9%. These declines were associated with a weakening of the union impact on wages between these two years from 11.5% to 3.5% for blue-collar unionists and from 8.2% to 2.6% for union members with a high school education.

The weakening of the union impact on the wages and benefits of blue-collar and less formally educated workers doesn’t just lower their standards of living. It also leads to greater inequality in wages; the gaps between college-educated and high school graduates and between white collar and blue collar workers have been growing at the same time that union densities have been falling. According to The State of Working America, “. . . deunionization can explain about a fifth of the growth in the college/high school wage gap among men between 1978 and 2011.” And “[the] lessened effect of unionism can account for 76.1 percent” of the growth of wage inequality between white- and blue-collar employees. What is more, the growing disparity between those at the top of the income and wealth distributions—the infamous 1% justifiably vilified by the Occupy movement—and the rest of us has its roots in the rapidly growing power of the rich and the dwindling power of workers. As unions lose strength, so too do all those who labor. The unions themselves begin to make concessions that boost corporate profits and the incomes of those who own the businesses. It is a rare union in the manufacturing sector that has not agreed to a two-tier wage system in which new hires receive a fraction of what senior employees earn for the same work. Hard-won work rules are discarded, giving companies free reign to compel more work effort from those producing our goods and services. This is combined with brutal workforce reductions, which place heavier burdens on those remaining. Once unions make concessions, it is open season on nonunion workers. The “threat effect” of unions disappears, and employers have a free hand to impose draconian “lean production” techniques (such as kaizen or “constant improvement,” which relentlessly speeds up production by making fewer workers produce the same or greater output). Productivity and profits rise, but workers get no more money, and this further increases inequality.

As inequality rises, a host of social problems intensify. These are best exemplified by the old saying: “Them that’s got is them that gets.” Inequality diminishes democracy, as the rich come to rule the government with an iron hand. Those with bundles of money vet the candidates for public office, finance their campaigns, and place insurmountable pressure on politicians to put in place laws and regulations that benefit them and harm those without the requisite cash. The fortunes of the ultra-rich are so vast today that a handful of billionaires, including the infamous Koch brothers, can lead a successful assault on public education, or anything else they don’t like. By moving their money from country to country, they can bend most governments to their will, compelling them to abandon or privatize social welfare programs and the provision of public services. Their control of the mass media makes a mockery of public discourse and investigative journalism. The economic elite mass their power to make any attempts to slow the accumulation of capital—never-ending increases in profits and ever more rapid growth—impossible, which means, among other things, that our climate catastrophe will continue unabated.

Inequality has many socially harmful consequences that get little attention despite their serious nature. If we consider different places (for example, states in the United States or countries) with similar average incomes but dissimilar degrees of income inequality, those with greater inequality display less social cohesion and more individual pathologies. In a recent essay, I wrote that “inequality is also harmful to the formation of the social bonds so necessary for human well-being. It isolates us from one another; in effect, there are two worlds, that of the rich and that of the rest of us. The rich exert power over us and, by doing so, deny us our full humanity.” Eric Schutz, in his book, Inequality and Power: The Economics of Class, puts this in terms of alienation:

The concept of alienation clarifies both the extent and the significance of what is lost for those subordinated in social power structures. Not only is their full self-initiative denied … but the full development of their faculties and intentions in all other realms of life is thereby stifled and more or less permanently stunted. People . . . manifest behaviors ranging from withdrawal to social or intellectual incompetence, from distraction to aimlessness or apathy, from anger, confusion, depression and anxiety to obsession and neuroses and, in some, violence of one kind or another.

States with greater inequality in the distribution of income also had higher rates of unemployment, higher rates of incarceration, a higher percentage of people receiving income assistance and food stamps, and a greater percentage of people without medical insurance. Again, the gap between rich and poor was the best predictor, not the average income in the state.

Interestingly, states with greater inequality of income distribution also spent less per person on education, had fewer books per person in the schools, and had poorer educational performance, including worse reading skills, worse math skills, and lower rates of completion of high school.

States with greater inequality of income also had a greater proportion of babies born with low birth weight; higher rates of homicide; higher rates of violent crime; a greater proportion of the population unable to work because of disabilities; a higher proportion of the population using tobacco; and a higher proportion of the population being sedentary (inactive).Lastly, states with greater inequality of income had higher costs per-person for medical care, and higher costs per person for police protection.

While the collapse of organized labor harms workers economically, both directly through lower wages and benefits, and indirectly by generating greater inequality, it also has other consequences for laboring men and women. Unions give employees a voice in their workplaces they otherwise wouldn’t have; they give you the power to fight your employer instead of quitting and finding another job. With a union, you can’t be legally discharged for standing up to the boss; without one, you are in most circumstances an employee at will, and your employer can get rid of you for any reason at all. If your supervisor told you to vote for a certain political candidate, and you said it was none of his business how you voted, he could discharge you on the spot. With a union, if this happened, you would have powerful legal recourse, and you would get your job back plus lost wages and benefits. The sense of collective empowerment that unions can give us at work helps build the solidarity necessary for any challenge we might want to make against those who wield power over us.

A union can also be an educator. We can learn valuable lessons about democracy, power, and our own capacities just by participating in union meetings, collective bargaining, strikes, picketing, and boycotts. In addition, a union can provide more formal and general education for its members, through its own education programs or by funding member enrollment in labor studies programs. Members can thereby learn things they didn’t in school and be better prepared to wage class war against their oppressors.

We see then that the entire U.S. working class has lost much as a result of the downward spiral of union membership. Therefore, a great deal would be gained if this spiral were reversed. Millions of words have been written about what needs to be done for this to happen. I have written some of them. Right now, I am not optimistic. I hope that the examples of the Wisconsin Uprising, the OWS revolt, and the Chicago Teachers strike will resonate with working people and they will build on them to revitalize the labor movement. However, our economic and political systems have a great talent for absorbing and deflecting protests, as the recent all-out support by labor unions for Obama clearly shows. And most unions have no interest in educating their members, in democracy, in building class solidarity, in waging war against their class adversaries, in political independence. Employers, on the other hand, are united and confident. They will continue to escalate their war on workers. Their goals are more sharp declines in union membership and the ultimate dismantling of what little power unions still have. For now, look for their victories to continue.